Preliminary Title Report & Links

Preliminary Title Report & Links

  1. One of the more important documents in a Sale is the Preliminary Title Report.
  2. A Preliminary Title Report will reveal various liens, encroachments, easements and anything else recorded against the property.
  3. The report comes from a search of county records in order to issue title insurance, and any liens against the property are listed as “exceptions” to title insurance.
  4. Also, other documents that have been recorded with the county will be listed on the report as well as attachments.
    1. Road Maintenance Agreements.
    2. Age Restrictions.
    3. CCRs [if no active Homeowner Association].
  5. Most Title Companies now provide an “E-Pre” including links [usually in blue] that may be accessed by clicking on the link. Always click on these links and keep copies of these attachments.
  6. Always go over the Preliminary Title Report with your Buyer and have Buyer sign the cover page of the report and all “links” that you pull from the report.
  7. If you or the Buyer have questions, call the Title Officer for clarification.

Why Do I Need a Preliminary Title Report?

The preliminary title report will show if anyone other than the seller has a legal claim on the property. For instance, suppose a home’s seller is divorced, his ex-wife may still be listed as a co-owner of the property. This may require a “Quit-Claim” Deed.

Always Review Your Title Report as Soon as You Get It!

You’ll usually get your Preliminary Title Report within a few days of contract acceptance. Read it immediately. You only have a few days after receiving your report to review and approve it before removing contingencies.

What Issues Should I Look for on My Title Report?

  1. Liens: Also known as an encumbrance, a lien is a legal claim of ownership listed on the title of a home.
    1. A Lender will have a substantial lien on your home, and will continue to have a lien on your home until your loan is paid off.
    2. Anyone owed money by a homeowner can file a lien on a home, including utility companies, city tax departments, or contractors.
    3. Sometimes a former spouse can file a lien for unpaid child support.
  2. Easements: Easements are a right to use another person’s land for a specific purpose.
    1. There may be an easement granted to a neighbor to cross a portion of the lot to access a road or well. The neighbor would have no right of possession, and can not build or plant on the land.
    2. Other common examples are easements granted for the placement of utility poles, water lines and sewer lines.
    3. An easement will not necessarily prevent a home from being sold, but it may give the buyer a reason to back out of the purchase, since it can restrict what the Buyer is allowed to do with her new property.
  3. Encroachments:
    1. Fences, common walls or other parts of neighboring lots that cross property lines.

Clear vs. Marketable Titles

  1. A clear title has no issues, such as easements.
  2. A marketable title, however, may have easements or other issues that are not considered conflicts of ownership.
    1. By default, your contract may only give you the right to receive a marketable title; however, Buyer may be obligated to give land access to a neighbor, or Buyer may not be permitted to build in a way that obstructs your neighbor’s view.
in Buyers, Compliance, Listings